(October 16, 2014)

On October 16, 2014 the European Court of Justice (ECJ) ruled in case C-605/12 Welmory sp. z o.o. versus Dyrektor Izby Skarbowej w Gdańsku (ECLI:EU:C:2014:2298).

The following question was referred to the ECJ for a preliminary ruling:

For the purposes of the taxation of services supplied by [the Polish company], which is established in Poland, to [the Cypriot company], which is established in another Member State of the European Union, in circumstances where [the Cypriot company] carries out its economic activity by making use of [the Polish company’s] infrastructure, is the fixed establishment within the meaning of Article 44 of [the VAT Directive] situated in the place in which [the Polish company] is established?

The ECJ ruled as follows:

A first taxable person who has established his business in one Member State, and receives services supplied by a second taxable person established in another Member State, must be regarded as having a ‘fixed establishment’ within the meaning of Article 44 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2008/8/EC of 12 February 2008, in that other Member State, for the purpose of determining the place of taxation of those services, if that establishment is characterised by a sufficient degree of permanence and a suitable structure in terms of human and technical resources to enable it to receive the services supplied to it and use them for its business, which is for the referring court to ascertain.

For further information click here to be forwarded to the text of the ruling as published on the website of the Court of Justice, which will open in a new window.

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